Investment council should require disclosure

Settlements with four individuals in a lawsuit that a State Investment Council committee made in secret on behalf of the council should have been ratified by council vote in the noonday sunshine.

While the deals may not violate the state’s Open Meetings Act per se, they do violate the spirit of the law and good, open government practices.

The council’s litigation committee met in private in late 2012 and unanimously agreed to the settlements with the so-called placement agents — middlemen who allegedly helped broker politically influenced investment deals during the administration of former Gov. Bill Richardson.

The financial consultants did not admit wrongdoing, of course, but each agreed to pay the SIC amounts ranging from $100,000 to $300,000. They also promised to cooperate with the council’s ongoing legal efforts to recoup larger amounts from other defendants and fund managers.

The SIC created the committee in June 2012 as part of a new settlement policy that allows the committee to meet behind closed doors to discuss legal matters and potential settlements. Two SIC members are on the council, as is Gov. Susana Martinez’ deputy chief of staff, who is a lawyer.

The settlements, while encouraging attempts to recover some of the state’s losses, should have been formalized in public view. After all, public money was lost and public money is being recovered.

The SIC’s contention the deals were not “secret,” partly because their terms have been available to the public on request under the Inspection of Public Records Act and because the Open Meetings Act allows delegation of authority and discussion of litigation issues behind closed doors, still doesn’t represent the transparency of true open government.

While the SIC’s settlement policy “strongly disfavors” confidentiality provisions and requires all settlements to be available upon request, it doesn’t explicitly require public disclosure. It should.

The SIC should consider revising its policy to come into line with the full spirit of the law and to require the full council to ratify such legal agreements.